Soaring demand for Apple and Samsung smartphones helped ARM Holdings to defy
the slowdown in electronic chip sales and increase profits by almost a
quarter.

The Cambridge-based technology firm, which designs the microchips used in nearly every mobile in the world, increased pre-tax profits 23pc to £66.5m in the three months to the end of June. Sales rose from £117.8m to £135m.

Some 2bn chips based on its designs were sold during the period, a 9pc rise on the previous year, despite a slowdown in sales across the wider chip industry.

Warren East, chief executive of ARM, said the company had benefited from the success of its customers, as they “gained market share within existing markets and launched products which are taking ARM technology into new markets”.

The firm receives an up-front licensing fee for each of its designs, as well as recurring royalty income every time an individual chip is manufactured based on that licensed template.

By specialising in microchips that do not require much energy to run, ARM has established a near-monopoly in the market for smartphones and tablet devices. However, it is starting to face competition from US rival Intel, which launched its first mobile chip designs at the start of this year.